The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Saturday, 26 January 2013

Reflections on the Eurozone crisis: austerity, neo-liberal restructuring and resistance.

Over the last 14 months, I have
published several posts dealing with aspects of the Eurozone crisis and the
struggle against the imposition of austerity across Europe. In this post, I
will bring them together in one narrative. My general focus is on uneven and
combined development in Europe as the underlying structural dynamic of the
crisis, neo-liberal restructuring and its limits, the move towards
authoritarian government as well as issues of resistance in the European core
and periphery.

This post highlights the shift towards
authoritarian government in Europe’s periphery with a particular emphasis on
the cases of Greece and Italy. As elected governments find it impossible to
impose further austerity on their people due to increasing levels of
resistance, the move towards non-elected, technocratic governments is regarded
as the only way of continuing with neo-liberal restructuring. While negative in
itself, this shift is also testimony to the increasingly powerful resistance
movements, indicating the intensification of class struggle and the wider
cracks in the currently dominant order.

The EU’s demands for direct oversight
over Greek budgetary spending in order to ensure that promised cuts are
actually implemented in exchange for further bailout payments provides the
background for this post. Drawing on Rosa Luxemburg’s analysis of capitalist
expansion, it is outlined how such a process of providing ever larger financial
assistance to peripheral countries until direct control over these countries’
finances are demanded is not a unique historical event. Instead, it is closely
related to the underlying structural dynamics of capitalism. Attempts to
overcome crises through outward expansion tie the periphery closely into the
development of the core, while increasing the unevenness of development between
core and periphery at the same time.

This is the first part of a review of
the book Crisis in the Eurozone (Verso, 2012), in which Costas Lapavitsas et al
establish the uneven way of how different countries have become integrated into
the political economy of the EU, which is at the heart of the Eurozone crisis.
While Germany experiences an export boom, peripheral countries such as Greece
have for years absorbed these exports without being able to increase their own
competitiveness. The book also illustrates well how the current problems go
right back to the design of Economic and Monetary Union (EMU) in the 1990s and
the related change in the balance of power between capital and labour in favour
of the former. The establishment of EMU and the related institutionalisation of
neo-liberal economics in Europe were from the very beginning in the interests
of capital and here in particular transnational European capital, as it allowed
employers to play off workers from one country against workers from another
country. As the institutional bias of EMU put systematic downward pressure on
wages across the Eurozone, trade unions were weakened and put on the defensive.

It is generally assumed that German
workers have greatly benefitted from their country’s export success and that
they are, therefore, the key winners of the current Eurozone crisis. In this
post, I dispute such an understanding. I demonstrate that German export success
has been built on drastic cuts in social welfare benefits, downward pressure on
wages and an increasing informalisation of the German labour market. Workers’
falling share in wealth as well as the general increase in inequality in German
society is the dark underbelly of success. Hence, the enemies are not workers
of other countries, but capital as a whole, which uses the crisis for an attack
on workers in Europe’s core and periphery alike.

This post analyses the Eurozone crisis
against the background of European integration around neo-liberal restructuring
since the mid-1980s. Internally, this was realized in the Internal Market
programme and the establishment of Economic and Monetary Union. Externally, neo-liberal
restructuring was sustained in successive waves of further enlargement as well
as the EU’s external trade policy Global Europe. The increasing unevenness
within the EU political economy is a result of these policies and ultimately
indicates the limits of sustaining capitalist accumulation through constant
deregulation and flexibilisation. A radical departure from neo-liberal
economics is required, if the situation is to be turned around.

In this post, I focus more directly on
issues of resistance. Drawing on Trotsky’s concept of uneven and combined
development, I argue that it should not come as a surprise that open resistance
is much more visible in Athens than on the streets in London. While the UK is
still characterized by fairly homogeneous social relations, it is in Europe’s
periphery, where the most modern forms of capitalist production encounter
outdate social formations. Hence, the cracks as a result of austerity show up
first and a generally socially explosive mixture is forming.

Although neo-liberal restructuring has
reached its limits in Europe, this does not automatically imply that it will
collapse. In this post, I discuss several potential future scenarios, including
an extended period of muddling through based on increasingly authoritarian rule
in the periphery, a right-wing xenophobic backlash as well as progressive
responses moving us beyond neo-liberal restructuring.

In the second part of my review of
Crisis in the Eurozone (Verso, 2012) by Lapavitsas et al, I further engage with
discussions about potential future scenarios. The focus is on the suggested
debtor-led default by Greece combined with an exit from the Euro. For this to
work, the authors are clear that drastic change is necessary including the
nationalization of banks, thereby changing the balance of power between capital
and labour in favour of the latter. Equally important is a change in the nature
of the state, reflecting the underlying shift in the balance of class forces
and ensuring that labour’s interests are at the top of the agenda.

From 8 to 11 November 2012, European
anti – neo-liberal globalisation movements met in Florence/Italy to discuss
strategies towards another Europe. This post reflects on the tensions between
various movements, the disagreement over whether reform or transformation is
the way forward, as well as the achievements and alternative possibilities.
This meeting demonstrated that the European left is currently weak and
fragmented. Nonetheless, it also indicated potential alternatives. Especially
the Alter Summit process, launched at Florence 10+10, provide reason for hope.